Banks' net income, NPLs up end-March

DESPITE continued provisioning for bad loans, the Philippine banking industry recorded higher net income as of March this year.

The industry's net profit was P66.33 billion at the end of March 2022, up 26.30 percent from P52.52 billion a year ago, according to preliminary statistics released by the Bangko Sentral ng Pilipinas (BSP) on Thursday.

Total operating income, on the other hand, increased 6.72 percent to P226.68 billion at the end of March 2022 from P212.39 billion the previous year, while losses decreased 6.72 percent to P18.34 billion from P19.67 billion at the end of March 2021.

Banks' provision for credit losses on loans and other financial assets fell 9.44 percent to P20.99 billion at the end of March 2022, down from P23.18 billion the previous year. Bad loan write-offs was P951.87 million, down 72.27 percent from P3.43 billion the previous year.

Gross nonperforming loans (NPL) in banks saw an uptick of 2.68 percent year on year to P460.45 billion at the end of March 2022 from P448.44 billion the previous year.

The central bank defines NPLs as "loans, investments, receivables or any financial asset that are considered impaired under existing accounting standards, classified as doubtful or loss, in litigation, or with signs that full repayment of principal and interest is unlikely without foreclosure of collateral, if any."

By the end of March 2022, the total loan portfolio of banks had grown by 5.81 percent to P11.28 trillion from P10.66 trillion a year earlier.

The gross NPL ratio at the end of March 2022 was 4.08 percent, down from 4.24 percent a month earlier and 4.21 percent the previous year. This figure represents the percentage of loans that are problematic, including interbank loans.

The latest NPL ratio has dropped to its lowest point in three months, or since December 2021, when it was at 3.97 percent.

Source: TheManila Times